Sunday, August 5, 2018

To Hedge Or Not To Hedge? That Is The Question -- August 5, 2018

I have no clue how to read these charts, but back on June 28, 2018, John Kemp posted this over at Twitter saying that WTI is "in steep backwardation":


Severe backwardation: prices of WTI to be going down going forward.

Now this from oilprice today.
Those hedges were likely secured last year, when oil traded at lower levels. The shale companies locked in those positions as a risk management strategy, guarding against the possibility of a meltdown in prices. If the economy had crashed or OPEC decided to flood the market once again for some reason, and oil prices fell back below $50 per barrel this year, those companies would have been protected.
As it happened, however, prices surged in the first half of this year.
WTI surpassed $70 per barrel in the second quarter, rising to its highest point in more than three years.
Some shale drillers were stuck selling their oil for prices in the mid-$50s. Anadarko said that it missed out on nearly $300 million in pre-tax revenue because it was locked into hedges. 

Off The Net -- Going Biking -- Again -- Great NASCAR Race -- One Of The Best In A Long Time -- August 5, 2018


Random Look At Statoil's Charlie Sorenson 17-8 2H, Alger Oil Field -- August 5, 2018

Another great well that appears not to have been refracked.
  • 20305, 3,431, Statoil, Charlie Sorenson 17-8 2H, Alger, t12/11; cum 406K 6/18;
Selected production data:

BAKKEN3-20171230493047549326272024603
BAKKEN2-2017281322413291181041274894943253
BAKKEN1-2017271231212087223631151710721790
BAKKEN12-2016264755628002662660
BAKKEN11-201630249226582504
BAKKEN10-20161700000
BAKKEN9-201630040000
BAKKEN8-20160050000
BAKKEN7-20162935234273333728392721118
BAKKEN6-2016304069384636763123307152
BAKKEN5-20162638184093359228222714108
BAKKEN4-2016304241410242943375329976

The graphic:



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Her First Bicycle



MRO Getting Ready To Frack Five Wells In Reunion Bay? -- August 5, 2018

This well was taken off-line 9/17:
  • 20287, 1,244, MRO, Johnson 44-32H, Reunion Bay, 35 stages; 3.9 million lbs, t10/11; cum 307K 6/18;
It's possible that MRO is getting ready to frack five wells to the east of #20287 (the wells yet to be fracked: #34598 - 34602, inclusive).

This neighboring well has not been re-fracked:
  • 16778, 354, MRO, Jack Pennington 21-28H, Reunion Bay, t8/08; cu 485K 6/18, production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-201824424943352409463523531900
BAKKEN5-201825557455883236643721133870
BAKKEN4-20183080017978495197218567109
BAKKEN3-20183195149476534711148989245
BAKKEN2-20182875077485425882406381880
BAKKEN1-20181117861867118921001121741
BAKKEN12-20173193969366537310480924535
BAKKEN11-2017308946893352471085480221686
BAKKEN10-201731109461090069011346288083288
BAKKEN9-2017301091110854752311766104090
BAKKEN8-2017311152011549856212537111090
BAKKEN7-2017311110511259988812136107530
BAKKEN6-201730101079974105371254696001676
BAKKEN5-2017311045510416145831303886753049
BAKKEN4-20170000000
BAKKEN3-20170000000
BAKKEN2-20170000000
BAKKEN1-20170000000
BAKKEN12-20162844864532136661495040467
BAKKEN11-20163046234569138262575240349
BAKKEN10-20163150655078166667385565445

Repeating, this well was taken off-line 9/17:
  • 20287, 1,244, MRO, Johnson 44-32H, Reunion Bay, t10/11; cum 307K 6/18;
The neighboring MRO 3XXXX wells in the section to the east have not yet been fracked according to FracFocus -- no data yet.

The neighboring wells farther west were more recently fracked and explain #16778 above.

Random Look At Airport And Lougheed Wells On North Side Of Williston -- August 5, 2018

This should be interest to all Willistonites. This well has not been re-fracked:
  • 20282, 2,671, Statoil, Williston Airport 2-11 1-H, Todd, t10/11; cum 301K 6/18; note production profile at this post.
The graphics:



The wells:
  • 31980, 2,137, Statoil, Lougheed 2-11 XE 1TFH, Todd, t6/17; cum 66K 6/18;
  • 31979, 2,830, Statoil, Lougheed 2-11 5H, Todd, t6/17; cum 127K 6/18;
  • 31978, 2,008, Statoil, Lougheed 2-11 4TFH, Todd, t7/17; cum 93K 6/18;
  • 31974, 2,578, Statoil, Lougheed 2-11 7H, Todd, t7/17; cum 162K 6/18;
  • 31973, 1,613, Statoil, Lougheed 2-11 8TFH, Todd, t7/17; cum 96K 6/18;
  • 31972, 3,072, Statoil, Lougheed 2-11 XW 1H, Todd, t7/17; cum 137K 6/18;
  • 20282, 2,671, Statoil, Williston Airport 2-11 1-H, Todd, t10/11; cum 301K 6/18;

Off The Net -- Biking Home -- Then NASCAR

NASCAR Finish was fantastic! Chase Eliott wins on his own, as #2 Truex runs out of gas with finish line in sight. Chase Elliott ran out of gas just after crossing the finish line. Jimmy Johnson, #48, pushed Chase Elliott back to victory lane. Wow.

Updates

Later, 3:01 p.m. CDT: This may be the most fascinating non-energy western North Dakota story so far this year. Over at The Bismarck Tribune.
The Bureau of Land Management is seeking public input on what action to take after a Dunn County rancher built a bridge across the Little Missouri River that the agency says trespasses on public land.
The east end of the single-lane bridge northwest of Killdeer is on land owned by rancher Wylie Bice. But the west end of the bridge is on an isolated 76-acre tract of land managed by the BLM.
In addition, the BLM says an unpaved access road, a water settling pond and portions of two alfalfa fields are on public lands without permission. In all, nearly 13 acres of public land are affected.
One has to read deep into the article learn that this bridge was built in 2013, sustained some damage in 2014 due to flooding/high waters, but was repaired and raise. 
All the rancher's own expense.

Original Post 

93 degrees now; forecast to hit 99 degrees.

I forgot my safari hat -- it's going to be a hot bike ride home.

Something to get me ready for the bike ride:

Yes, Sir, I Can Boogie, Baccara

Wow, there's a lot of good stuff on the blog today. Enjoy.

Good luck to all.

Oh, one last look, what's going on at oilprice and Yahoo!Finance?

 

**********************************************
The Sports Page

I have no idea how well Tiger Woods is playing relative to his history.

I do know that the PGA and the networks hope that Tiger Woods continues to play well enough to keep making the cuts.

Today, Tiger finished tied for 33rd at the Bridgestone.  #40 out of the 71 that made the cut. Mickelson, 26. #30 out of the 71that made the cut. But look at this: Jordan Spieth, 60th. #62 out of 72 that made the cut. Only ten of those who made the cut played worse than Spieth.

Justin Thomas, Dustin Johnson, and Rory McIlroy are tied for #1. Ricky Fowler, tied for #8.

Four round in today's PGA tournament, Tiger Woods scorecard:


********************************
NASCAR

First stage: first stage just completed. Joey Logano, who finished at the same race track yesterday, crashed and DNF'd -- only the second time he has finished dead last while racing for NASCAR.

Later: I am really, really thrilled for Chase Elliott. Good for him.

********************************
MLB

If I had all the money in the world, I would be at Fenway Park tonight watching the New York Yankess playing the Boston Red Sox. But I don't and I'm not. 


Enerplus' Cat Wells

Updates

February 25, 2019: more of these wells are coming off the confidential list.


October 16, 2018: it looks like Enerplus is starting to report its "cat" wells (Hyena, Cheetah, etc).

Original Post
For newbies: note the nomenclature of these wells, the chronological numbers -- for example, in this legal name:
  • 33774, 788, Enerplus, Caracal 149-93-30A-31H-TF, Mandaree, 33 stages; 6.2 million lbs; t9/18; cum 100K 6/19;
    DateOil RunsMCF Sold
    11-201891315789
    10-20181652511198
    9-2018165755170
     
I believe the chronological number is 31. I could be wrong.

The Enerplus cat wells.

Section 8-147-93, Moccasin Creek oil field:
  • 31130, 2,184, Enerplus, Persian 147-93-06A-07H, Moccasin Creek, t4/18; cum 368K 8/19;
  • 31126, 817, Enerplus, Bengal 147-93-06A-07H, Moccasin Creek,  t5/18; cum 323K 8/19;
  • 31128, 1,515, Enerplus, Tabby 147-93-06A-07H TF, Moccasin Creek, t5/18; cum 197K 8/19;
  • 31127, 2,247, Enerplus, Manx 148-93-31D-30H TF, Moccasin Creek, t4/18; cum 181K 8/19;
  • 31129, 3,204, Enerplus, Siamese 148-93-31D-30H, Moccasin Creek, t4/18; cum 321K 8/19;
  • 31125, 2,388, Enerplus, Calico 148-93-31D-30H, Moccasin Creek, t5/18; cum 318K 8/19;
Section 30-149-93, Mandaree oil field:
  • 33774, 788, Enerplus, Caracal 149-93-30A-31H-TF, Mandaree, t9/18; cum 112K 8/19;
  • 33775, 1,644, Enerplus, Serval 149-93-30A-31H, Mandaree, 8 million gallons of water; 86% water by mass, t9/18; cum 278K 8/19;
    DateOil RunsMCF Sold
    12-20184655535861
    11-20182468615649
    10-20182450816608
    9-20184208213126
    8-2018760436
  • 33776, 1,379, Enerplus, Leopard 149-93-30A-31H-TF, Mandaree, t9/18; cum 116K 8/19;
    DateOil RunsMCF Sold
    11-2018105296675
    10-20181713011608
    9-2018276048610
  • 34413, 1,538, Enerplus, Honey Badger 149-93-30A-31H, Mandaree,10 million gallons of water; 88% water by mass, t9/18; cum 233K 8/19;
    DateOil RunsMCF Sold
    11-20181703910801
    10-20182431716479
    9-20183802011859
    8-201826661530
  • 24234, 1,335, Enerplus, Hyena 149-93-30A-31H-TF, 33 stages; 6.2 million lbs; Mandaree, t9/18; cum 102K 8/19;
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN11-201827121901221512230975177431538
    BAKKEN10-201831174081746617554243711183611975
    BAKKEN9-20182926660265053604837324826728575
    BAKKEN8-201816776131141947352591
  • 24235, 2,373, Enerplus, Cheetah 149-93-30A-31H, 32 stages; 5.8 million lbs, Mandaree, t9/19; cum 250K 8/19;
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN11-20182520965210161173116772133222787
    BAKKEN10-201831309763104914042371722104115251
    BAKKEN9-201830430524350233285516621356937333
    BAKKEN8-2018785647753182371027644495367
*****************************************
Production profiles for selected Enerplus cat wells:

31130:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-20182928898287271898720229124777116
BAKKEN8-2018252568425914190151669415938150
BAKKEN7-20182823976236031641816544159380
BAKKEN6-20183037223373412517724195217312139
BAKKEN5-20183060297605175476739193329676053
BAKKEN4-20181311294732069312186120130

31126:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-20182929956298411808917973129604358
BAKKEN8-2018293032930462211151668215536591
BAKKEN7-20182623342230081529816091155360
BAKKEN6-20183039869397902498123497231570
BAKKEN5-2018223631936059410471997619644332

31129:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-20182935845359061722428677229524972
BAKKEN8-20182831448315531666723585144858596
BAKKEN7-20182323895237521096217921144852932
BAKKEN6-20183030199301561475222650183883978
BAKKEN5-20183145775462802698234331257698328
BAKKEN4-20181312974732069318296180620



Cat's in the Cradle, Henry Chapin
 
**********************************
A Note To The Granddaughters
 
I received a nice note from a reader who sent me photos and comments about attending a donnieandmarieosmond concert in Las Vegas. It was a very, very good note and brought back a lot of memories. Perhaps out of context this note won't make sense, but this was my reply, unedited, and not ready for prime time:
1. When I saw the first photo of the gentleman with Marie Osborn, I thought that Donnie had really changed. LOL. 
2. You and your wife really get around; good for you. 
3. I've gone to very few live shows in Las Vegas -- and that was decades ago. They really put on incredible shows out there. When I went decades ago, the shows were much less expensive, much more intimate, and a lot less commercial (of course, I'm quite naive) but now, I no can longer handle crowds, so I don't go to shows. I was spoiled by my last years in the USAF when as a commander, I always had reserved seats and escorts to take me where I needed to go.  
4. Interestingly, I am less interested in live shows these days, and much more interested in the back story. Thus, one reason why I find three movies/television series so compelling: Mulholland Drive, Twin Peaks, and Birdman (The Unexpected Virtue of Ignorance).  
5. I was assigned to the premier fighter squadron in the USAF at the time "Top Gun" came out. The fighter pilots talked a lot about the movie. They might not admit it, but USAF pilots do have great respect for US Navy pilots. There is no question in my mind the gap between a US Navy pilot and a USAF pilot. 
6. I took my dad to see "Top Gun" figuring it was the best way to let him know of my experiences with the fighter squadron, the 22nd Tactical Fighter Squadron, an F-15 squadron, Bitburg (Germany) Air Base.

The Newfield Sorenson Wells In Sand Creek

34341, conf, Newfield, Sorenson Federal 153-96-4-9-12H, Sand Creek, very, very nice well; 55K first full month;
34333, conf, Newfield, Sorenson Federal 153-96-4-9-3H, Sand Creek, very, very nice well; 55K first full month;

34332, conf, Newfield, Sorenson Federal 153-96-4-9-11H, Sand Creek, very, very nice well; 55K first full month;
34331, conf, Newfield, Sorenson Federal 153-96-4-9-210H, Sand Creek, very, very nice well; 55K first full month;

34330, 3,184, Newfield, Sorenson Federal 153-96-4-9-2H, Sand Creek, 62 stages, 9.9 million lbs, t4/18; cum 133K 7/18; see below;
34329, 2,203, Newfield, Sorenson Federal 153-96-4-9-1H, Sand Creek, very, very nice well; 39K first full month; see below; t4/18; cum 84K 7/18;

**********************
34330:
DateOil RunsMCF Sold
6-20182824832459
5-20185453840271
4-2018847010

34329:

DateOil RunsMCF Sold
6-20181641618818
5-20183957445079
4-201892176360

US Remains The Natural Gas King -- Oilprice -- August 5, 2018

Updates

May 3, 2019: Beetaloo Basin, Australia, could add 500 trillion cubic feet; see this post;

December 6, 2018: USGS 2018 Survey of The Permian -- 46 billion bbls of crude oil; 281 trillion cubic feet of natural gas; and 20 billion bbls of NGLs.


Original Post

30-second elevator speech when it comes to natural gas: there is so much natural gas in the world, that as a commodity, it's all about free market capitalism and governmental policies (at all levels) that will determine winners (suppliers/consumers) and losers (suppliers/consumers) for the next fifty years.

For those in the know, I doubt there is anything new here, but some nice data points for future reference.

From oilprice, the data comes from BP's annual review, 2017 data.

US natural gas production (flat over the past three years):
  • 2017: 71.1 billion cubic feet per day
  • 2016: 71.1 billion cubic feet per day
  • 2015: 71.6 billion cubic feet per day
  • accounts for 20% of world's total natural gas production
Global history:
  • until the 1980s: US dominated global natural gas production
  • 1980s: Russia took the lead
  • past 50 years: the Middle East has grown its natural gas production at a much faster rate, and is on pace to take the lead in the next decade (2020s)
US history:
  • natural gas production in decline until the fracking boom which began in the middle of the last decade (the Bakken boom began in Montana, 2000; in North Dakota, in 2007)
  • production from the US grown by an astounding 51% from 2005 to 2015 -- the years of the Bakken boom -- pushed the US back into the global lead (memo to self: note to Jane Nielson)
US exports, LNG:
  • 2017: 1.7 bcfpd; about 2.4% of US production
  • Asia Pacific: received 41% of this production
  • Mexico: received 22%
US exports, pipeline:
  • 6.3 bcfpd, or 8.9% of US daily production
  • Mexico: accounts fo 64% of the total
  • exports to Mexico are growing rapidly; last week, RBN Energy reported that exports to Mexico hit 5.0 bcfpd for the first time ever
****************************
Reserves

So, with all that, I assumed US reserves looked huge compared to the rest of the world, but this is simply astounding.

Reserves:
  • Middle East: 2.8 quadrillion cubic feet = 2,080 trillion cubic feet (quadrillion is 10^15; trillion is 10^12)
  • US: 309 trillion cubic feet (but see below)
I've long lost the bubble on global natural gas reserves (and I'm sure the reserves are currently way under-estimated) but back in 2016, this post:
Disclaimer: I often make simple arithmetic errors. Numbers rounded. Natural gas reserves according to BP/wiki, 2013 - 2014 (US estimate as of December 2013). Top five countries:
Now, let's go back and re-run the numbers that were posted earlier:
  • that recent huge Mediterranean natural gas find: 30 trillion cubic feet
  • Barnett, revised USGS figures: 53 trillion cubic feet
  • Utica, newly revised figures: 782 trillion cubic feet
  • Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
  • Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
  • Qatar: 800 trillion cubic feet, wiki, conversion
  • Mozambique, from the story above: 85 trillion cubic feet
That was back in 2013. Certainly we can do better.

From the 2018 BP review (2017 data), global natural gas reserves:

US natural gas reserves, February 13, 2018, EIA:
  • 341.1 trillion cubic feet; increased by 5% over 2016
  • Pennsylvania: added 6.1 tcf natural gas reserves, the largest net increase of all states in 2016 as a result of the Marcellus)
  • next largest net gains, after Pennsylvania: Oklahoma (3.7 tcf); Ohio (3.1 tcf); SCOOP, STACK, Utica
  • natural gas from shale as a percentage of total production: increased from 54% in 2015 to 62% in 2016
  • additions exceeded consumption by 30%
Discrepancies, observations, and further comments:

As noted above, the official EIA estimates for the US: 341 trillion cubic feet, but I think those numbers are "way low."

And from the numbers above, the numbers are all over the place (from the official EIA estimates to estimates by others.

Another source suggests the Marcellus-Utica could produce a quadrillion cubic feet -- which greatly exceeds current EIA estimates of total US natural gas reserves.

From NaturalGasIntel, undated but probably in 2015:
The Utica Shale is a massive formation that lies beneath portions of Ohio, West Virginia, Pennsylvania, Kentucky, Maryland, New York, Tennessee, Virginia and a part of Canada.
In a September 2012 report, the United States Geological Survey (USGS) estimated that the Utica has a recoverable potential of 940 million barrels of oil, and approximately 38 trillion cubic feet of natural gas.
That estimate, though, has proved conservative at best. With far more drill bits having proved-up the play in Ohio, a West Virginia University-led study released in mid-2015 estimated that the Utica contains more than 20 times as much technically recoverable natural gas resources than previously thought when the USGS released its report (see Shale Daily, July 14, 2015). 
20 x 38 = 760 trillion cubic feet of natural gas.

Parshall, ND, School District With Six To Twelve Positions Open -- August 5, 2018

From myndnow:
  • at the end of last school year, Parshall school district had 12 open positions
  • through hires from the Philippines, most positions have been filled
  • on average, the district has six positions open at the end of the year